Reuters: Technology News: KPN shares drop on dividend cut, costly licenses

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KPN shares drop on dividend cut, costly licenses Dec 17th 2012, 13:04 Tweet Share this Email Print Related News REFILE-UPDATE 2-Dutch 4G frequency auction raises more than expected Fri, Dec 14 2012 Investors offer about $38.8 billion in Greek buyback: source Mon, Dec 10 2012 Greece says lenders closer to debt viability compromise Fri, Nov 23 2012 Analysis & Opinion Corporate America fears taxes more than recession Related Topics Tech » Hot Stocks » Asian Markets » The logo of Dutch telecoms group KPN is seen in Haarlem May 31, 2012. Credit: Reuters/Paul Vreeker/United AMSTERDAM | Mon Dec 17, 2012 7:34am EST AMSTERDAM (Reuters) - Shares in Dutch telecoms group KPN plunged as much as 15 percent on Monday after it cut its dividend for this year and next to meet the much higher-than-expected cost of new mobile licenses. KPN, which is 28 percent owned by Mexican telecoms tycoon Carlos Slim, last week paid 1.35 billion euros ($1.77 billion) for 15 separate fourth-generation (4G) wireless licenses at a Dutch state auction. A new player, Tele2 of Sweden, also won licenses at the auction, a move that is expected to increase competition and hit tariffs. "All in all, we expect the entrance of Tele2 to intensify medium-term competition in the Dutch mobile market. This is negative news for KPN as we estimate KPN generates about 15-20 percent of group EBITDA (core earnings) from its mobile business in the Netherlands," ING analyst Emmanuel Carlier said. KPN warned on Friday it would not pay a final dividend for 2012 and would pay out only 0.03 euro per share for 2013, far lower than already revised dividend forecasts. It had already cut its dividend forecast for this year to 0.35 euro from an initial 0.90 euros. It has paid an interim dividend of 0.12 euro. KPN had been planning a payout for 2013 of at least 0.35 euro. Traders and analysts have previously expressed concern about the ability of KPN to pay dividends given it has a debt to core profit ratio exceeding its own targets. KPN shares, which hit a 10-year low of 3.90 euros in November, briefly touched that level again on Monday. It was the most traded stock on the FTSEurofirst 300 index relative to its 90-day daily average, at 2 1-2 times its average compared with 15 percent for the index as a whole. Incumbents KPN, Vodafone and Deutsche Telekom, and new entrant Tele2 won licenses at the 4G auction, which raised a surprisingly high amount of 3.8 billion euros for Dutch state coffers. Separately on Monday, KPN said it has sold its Spanish operations to France Telecom as it seeks to sell off non-core assets and keep its debt under control. It did not disclose the financial terms of the sale. (Reporting by Sara Webb; Editing by Erica Billingham) Related Quotes and News Company Price Related News Tweet this Link this Share this Digg this Email Reprints We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (0) Be the first to comment on reuters.com. Add yours using the box above.

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